Most Canadian restaurant owners raised prices last year, plan more hikes

Eighty percent of Canadian restaurant owners say they have already increased menu prices in the last year, and 60 percent plan to raise them again within the next 12 months, according to a new industry report. The Hospitality Operator Report 2026 by EconoLease, a commercial kitchen equipment financing company, found that rising costs for food, labour and rent are squeezing margins and forcing operators to pass expenses to customers. Food and beverage costs topped the list of fastest-rising expenses at 64 percent, followed by labour at 55 percent and rent at 32 percent. Over the past year, 40 percent of operators estimated their overall costs rose by 5 to 10 percent, while 38 percent estimated an increase of 11 to 20 percent.

Canadian operators raised prices more often than their American counterparts, with 80 percent reporting hikes compared to 68 percent in the United States. Despite the increases, fewer Canadian operators saw their profit margins improve, with 42 percent reporting better margins versus 64 percent of U.S. operators. Most of those gains were slight, and 27 percent of Canadian operators said their margins shrank, compared with 16 percent in the U.S. The data is based on an online survey of 250 Canadian foodservice and hospitality operators and owners conducted by Leger from June 22 to July 6, 2026. Statistics Canada data shows restaurant food prices increased by 3.1 percent year over year in September, ahead of grocery inflation at 1.7 percent. As restaurant prices keep climbing faster than grocery prices, every meal made at home saves consumers more, the report notes. The price gap is affecting consumer behaviour, with a separate survey for Restaurants Canada finding 80 percent of respondents are eating out less because of the cost of living, up from 75 percent a year earlier.

Lower-income households are still the most likely to cut back, with 87 percent of those earning under $50,000 saying they are dining out less. Among households earning $50,000 to $100,000, 81 percent are eating out less. The sharpest change came among higher earners, with 78 percent of households earning $100,000 or more cutting back, an increase from 70 percent in 2025. Diners increasingly feel "you're getting less and paying a lot more," consumer and retail analyst Bruce Winder told Global News. However, 61 percent of respondents said they would visit table-service restaurants more often if they had more disposable income, up from 53 percent last year. The survey for Restaurants Canada was conducted by Angus Reid in May with 1,500 Canadian participants. Regional differences also exist, with operators in Western Canada more likely to have already raised prices, while those in Ontario are more likely to be planning increases over the next 12 months.

With files from Yahoo News